. Montana

Oil drilling rig setting up in the lower Yellowstone Valley near Sidney, Montana.

2012 startup rate: 530 per 100,000 adults

Montana has fast become the no. 1 state for startup activity, according to the annual Kauffman Index of Entrepreneurial Activity, having raced to the top spot this year from a 17th-place ranking a year earlier,

Thanks in large part to Montana's vibrant oil and gas industry, people were more likely to launch businesses here than in any other state in the country last year. Many firms are sprouting up in northeast Montana around the booming Bakken fields, where demand is huge for products and services to meet the oil industry's needs.

The state also has a growing technology hub in Bozeman, where startups can find incubator space and funding opportunities at schools such as Montana State University.

While Montana's housing costs and personal income taxes are relatively high, other living costs there tend to be low, and there's no sales tax.

Source: 2013 Kauffman Index of Entrepreneurial Activity, published by the Kauffman Foundation. The 2012 startup rate for each state is based on a yearly national survey of about half a million people -- adults aged 20 to 64 who start a business each month with 15 or more hours worked. In Montana, for example, Kauffman found that 530 of every 100,000 adults started businesses in 2012.